How is Fintech transforming the banking sector?

The proliferation of the Fintech industries is a breakthrough for the global banking space. Observing the biggest Fintech deal from Europe, the Middle East, & Africa in 2021, market enthusiasts are willing to discuss the impact of ‘Finance plus technology’ on the diverse horizons of the marketplace.?

Fintech is not a term that needs any introduction to the millennials. The majority of ventures in the current market are adding to the global investments of around $112 billion which was recorded as $51 billion in the previous year.?

Aren’t these stats interesting enough to draw your attention to the impact of Fintech on the banking world??

As per Statista’s report, the global revenue share of the Fintech industry grew exponentially to reach 92 billion euros in 2019. Experts predict a steady growth of the Fintech market at an annual rate of 12 percent that will further contribute to generating 188 billion euros by the end of the year 2024.?

These stats reflect the superiority of Fintech over other modes of automating our finance & banking facilities. Let’s find out how digital technology is shaping the future of Fintech, particularly in the banking sector.?

Fintech in a nutshell

When Finance & Technology collaborate to frame a new innovation in financial & banking services, we call it ‘FinTech’ in our technical terms.

From banks to financial institutions, there is a huge count of fintech segments emerging around to make the most out of digital technologies in the form of online banking, mobile payments, crypto trading, financial management, data analytics, management, & much more.?

In earlier days, banks & finance institutions used to count on Fintech solutions to boost their back-end systems but now the scenario is entirely different. At present, more & more Fintech organizations & startups are taking over the edge by introducing modern finance apps for stock trading, and fund management, insurance payments, food ordering, & more.?

As per a study, approx 84% of Americans rely on Fintech to manage their finances. Furthermore, the majority of them use at least 2-3 finance apps for banking purposes. The study also reveals that the rapid evolution of FinTech can be a threat to traditional or offline banking facilities.?

Impact of Fintech on banking?

What’s more secure, simpler, & faster than digital banking in the present time? And the obvious answer is Fintech. In the world of tech-friendly users, fintech sailes through various alterations arising in the finance, banking, & insurance industries.?

While people continue switching to online banking modes, Fintech is all the way ahead to empower banking firms with advanced options to automate banking operations. Gone are those days when customers used to depend on traditional banking facilities that are not much satisfying & convenient.?

Over 69% of the global population access Fintech apps at least a fewer times a day. In fact, those having no bank accounts are using such apps to meet their day-to-day financial needs.

Needless to say, Fintech is an all-in-one option to boost financial operations & improve banking services for entities of finance firms & their customers.?

Want to get indulged in cutting-edge fin technology? Just scroll down to the next section to see how the impact of Fintech in transforming our banking sector.??

#1 Smart Chip Technology

Security is the topmost priority of every banking firm & the introduction of smart chip ATM cards has retained it up to a great extent.?

We’ve got ample alternatives to strengthen security systems & smart chip technology is one of them. Smart chip ATM cards are not new in trend. Users with such ATM cards can only transact with a one-time password for each transaction.?

Unlike other basic ATM cards that use magnetic stripe technology to enable the same pin for all transactions, smart chip ATM cards are integrated with EMV technology that automatically generates a unique OTP for each transaction.????

Hence, smart chip technology nullifies the risks of financial loss & mishaps as even if someone steals it, he won’t be able to do any disputable transactions.

While bank officials suggest customers use their ATM pins for card transactions, smart chip technology is taking over the traditional mode of doing so. With reduced hassles & security risks, the arrival of smart chip technology is a thrilling addon to explain the impact of Fintech on the banking industry.??

#2 Biometrics sensors?

The outburst of Fintech in banking has shaped numerous innovations to upscale its operations. Biometrics sensors are one such technology that combines with advanced iris scanners to provide multi-layer security to the entire transacting system with ATMs.????

Biometric sensors are way more progressive than smart chip technology eliminating the necessity to use a plastic card & remember a particular pin for each transaction.??

Right from facilitating a convenient & easy way to the transaction, the integration of biometrics brings a securer way to access your account & personal details without having to put your password every time. Almost every Fintech app is featuring a biometric setup to simply log in to your bank accounts by presenting your authenticity using a fingerprint scanner, palms, eye, & face recognition features.?

The user identification is highly secure, accurate, & comparatively faster on apps embedded with biometric sensors. It’s more hassle-less to simply put your finger & access your account at the last minute. So, even if a customer losses his/her ATM cards or details then it won’t be a matter to worry about at all.??

#3 Online Transactions

The impact of Fintech on the banking industry is yet again witnessed with the adoption of an advanced payment system across the entire nation in the early 1980s. Monetary control act (MCA) was brought to light to synchronize the operations of private banking organizations & Federal Reserve.

Here comes the involvement of Automated Clearing House in processing seamless electronic payments for salary, dividend payments, bill payments, insurance premiums, & all sorts of payments for utility bills.?

According to a report stated by The Federal Reserve in 2016, the total number of 3362 million online transactions were recorded in the year 2015 which is thrice the count of transactions processed in 2012.???

In a similar way, the no. of debit/credit card transactions surged to grow from 2.1 million in 2012 to 270 million in 2015. An increase of 90% in debit card users was also observed in the same period. As a result, there was an abrupt increase in the. of payments redirected from other merchant sites as well.?

#4 Chatbots for customer service?

The collaboration of chatbots with FinTech has garnered immense popularity over the past few years. These customer service chatbots are more like software that use machine learning technology & natural language processing to render human-like interactions to the users.??

One more example of a chatbot to discuss here is Japan’s reputed bank that assists customers to collect the desired information or query-related answer on their site. No doubt, these chatbots have become an imperative part of the banking system dedicated to ensuring customer satisfaction under the supervision of client support executives who’re ’available 24/7

#5 Branchless banking?

Fintech is a path-breaking innovation for the entire banking system. Banks that leverage brand-specific processes to run their digital channels such as social, online, website, & mobile are greatly dependent on Fintech to conduct omnichannel banking on the go.?

The impact of Fintech on the banking sector comes up with banks shifting to omnichannel banking to reduce their branches.?

Let’s sum it up!

The gradual adoption of Fintech financial technology in the banking world is a sole indication of how it’s transforming the future of banking & finance. While the customers are turning more reliant on the modern modes of transacting, the majority of banks & finance startups are turning towards Fintech app development to stay ahead of the everyday innovations arriving in their market segment.?

Fintech is booming around the world, specifically in banking & it’s not fair to neglect its potential anyways. If you’re the one who wants to invest in Fintech apps or have any ideas to add your innovation then Hie HQ is here to guide you. As a trusted product partner, our brilliance is recognized with a proven track record of co-building high-performing products as software solutions for emerging brands.?

We’re spearheading with our expertise in product innovation, be it simple or highly complex, and we ensure to get it shipped to you within a matter of weeks. AT Hie HQ, our dedicated product engineers are committed to meeting the quality standards of every product they co-build with our clients. Our industry-specific services are driven by our startup-centric approach empowers us to shape world-class products to help startups, SMEs, & growing businesses with digital excellence.?

Interested to know more about us & our services? Contact us today.?

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